\chapter{Introduction}
\label{introduction}

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\textbf{Responsible team member:} Tetiana Dankevych

% this part will describe some problems and their possible solutions which we
% can find in the field of healthcare and especially in quality management
Healthcare is a very important topic, which affects virtually everyone. One of
the most important aspects regarding healthcare is the quality of the service
which customers, and in this case patients, are getting. As Department of
Economic and Social Affairs at United Nations states ``Population ageing is
unprecedented, without parallel in human history and the twenty-first century
will witness even more rapid
ageing\ldots''\cite{OECD2013}\footnote{\url{http://www.un.org/esa/population/publications/worldageing19502050/}},
 which means that general healtcare is getting more advanced and people leave on average longer. Our medicine is becoming increasingly complex and the need
for accurate quality control is apparent.\\
\\
In order to be able to analyze healthcare quality in particular locations it is
necessary to find a tool or a framework which will enable such analyzis to be
conducted in a timely manner and standardize the results in such a way, that
they are comparable. In this paper we will focus on quality management,
frameworks for its rapid assessment and in particular we will introduce Business
Model Canvas as a standardized representation way of health care service sector
and a helpful tool for successful implementation of quality management
activites.
%
\section{Motivation}
\label{motivation}
%
It is a long term trend, that governments set ever bigger parts of budgets for
health care expenditures. This is also confirmed by Organization for Economic
Co-Operation and Development
(OECD)\cite{OECD2013}\footnote{\url{http://stats.oecd.org/}}.
According to their statistics nearly all member countries of OECD increased
their expenditure sinse 1970, i.e. USA dedicate now more than double as much
resources than in 1970, this can be seen in the Figure \ref{oecd}.\\
%
\begin{figure}[ht]
\centering
\includegraphics[scale=0.6]{images/HC_OECD_bold.pdf}
\caption{OECD Healthcare Expenses as \% of GDP}
\label{oecd}
\end{figure}
%
%
As ``The Economist'' states, the quality of healthcare has risen, but also
has the cost of such
services\cite{A.C.S2012}\footnote{\url{http://www.economist.com/blogs/freeexchange/2012/01/fiscal-policy}}.
To be able to control this process several activities can be established, such
as correct incentives for the personnel, good education and quality
management. But as it happened in manufacturing in the middle of the
20$^{th}$ century, the key to the accomplishment of efficiency lies in the
quality. For example car makers have reached high levels of efficiency by
concentrating their effort on quality management. Quality is defined by
Basu\cite[p. 6]{Basu2004} as a degree, to which product
or a service satisfies the customer requirements. With this definition in
mind we can see, that with regard to healthcare, quality has many parameters,
such as time, cost, efficiency and others, which can be optimized. Thus,
quality management should be implemented as an essential part of service
improvement in healthcare.\\\\
%
Healthcare is a very complex system of different organizations, which interact
in order to provide service to a customer. These insitutions have their own
goals and can have an influence on the quality of treatment. Often medical
institutionas are devided into separate parts, like administration, technical
personnel and doctors. This isolation of areas can also lead to an egoism among
them, which has an impact on the overall quality, see Figure
\ref{healthcare_types}.\cite[p.10]{C.Rasche2010} For these reasons
we propose a holistic view on the organization, which would lead to a better evaluation and
also would prevent vicious circles, where one part of organization points to the
other if something goes wrong.\\
%
\begin{figure}[ht]
\centering
\includegraphics[scale=0.52]{images/healtcare_SCCE.pdf}
\caption{Healthcare types}
\label{healthcare_types}
\end{figure}
\\
%
There are several ways to create a view of a specific organization. One of them
emerged in the late 90$^{th}$, when institiouns were described with help of
Business
Models\footnote{\url{http://www.cs.uu.nl/docs/vakken/ec/Timmers_BMem.pdf}}.
Since then Business Models are continiously present in scientific publications.
In the youngest time new frameworks are created to describe the business models, i.e. Vlaue
Envelopes, Busines Plans, Business Model Canvas and others. One of the newest
approaches is to draw a Business Model Canvas (BMC) to illustrate the
organization on one page. This tool was described by Osterwalder in 2010 and
since then gained on popularity, but also on acceptance among professionals. Our
concern in this paper is that hospitals and other healt care organizations are
different from commercial organizations, on the other hand, public organizations
are pushed to operate as private, and thus, they are confronted with such issues
as budgeting, efficiency, processes, organization and other essential aspects
which differentiate between losers and winners among private companies.
Furthermore it is usually the case, that when a business model makes sense and
is functioning, then the quality should also be on a high level, because they
are linked together. For this reason it is possible to analyze business model of
a particular entity and from this to draw conclusions form it about the quality
of the product or service and also about the quality management itself. To
describe all the tools for business models would go beyond the scope of this
paper, for this reason we decided to concentrate on Business Model Canvas in
connection with quality management in healthcare. Because hospitals have
different business models and complex structure it is tedious to bring them
all together to one standardized view with old tools. For time reasons no
detailed business plan can be written as well. What we need is a tool which
can summarize the information on one page in a clear way. All these
requirements lead to application of Business Model Canvas in our case (see
Figure \ref{bmc}).\\
%
\begin{figure}[ht]
\centering
\includegraphics[scale=0.08]{images/business_model_canvas_poster.pdf}
\caption{Ready-to-Use Business Model Canvas}
\label{bmc}
\end{figure}
%
Business Model Canvas consist of separate parts, which can be applied to any
business. On one hand key activities, key partners and key ressources can be
easily identified. On the other hand, revenue streams, channels, value
propositions  and customer relationship are a bit tricky to map to a hospital
and we will try to accomplish it with this paper. In particular, we would like
to experiment with value propositions in order to be able to differentiate
between the institutuions.\\
\\
In this paper we will first describe the meaning and theoretical background of
Business Model Canvas. We will differentiate from Porter Model and from the SWOT
Analysis. Then a description of work done will follow, where results of our
interviews with different involved parties are presented. We also evaluate the
results with respect to applicability of BMC for description and quality
management in healthcare.
%
%
\section{Goal}
\label{problemstellung}
Goal of this paper is to investigate the possibility to use Business Canvas
Model not only in private sector, but also in healthcare sector. Furthermore we
intend to analyze to what extent BMC can provide useful information for quality
management.\\
\\
The main challenge here is to transfer aspects of a private business to a
hospital. Whereas private companies have usually profit maximization as their
target, hospitals main concern is wellbeing of the patients.\\
\\
Furthermore it is of great interest to what extent can BMCs support the
process of business model description in healthcare. We think, that all parts of
the canvas can be applied to a clinic or a hospital. It can be especially useful
when comparing different organizations to each other. Furthermore it is
considered, that the canvas gives a very good overview of key features of the
business model in limited space. Since healthcare has a very complex structure
the more it is plausible to apply BMC in this area.\\
\\
Ultimately the goal of this paper is to find out how Business Model Canvas can
help the hospitals to get quality mangement on track. Furthermore it can be
compared to other approaches, which were undertaken in order to implement
quality management. We want to investigate if there were such efforts and if
yes, then what were the challenges and where BMC was superior to the earlier
methods.
%
\section{Related Work}
\label{relwork}
Here we would like to present research from other scientist who are working in
the same field of healthcare quality management. The idea is not new and a
widely accepted definition of healthcare quality was formulated by Institute of
Medicine (IOM) in 1990. According to them quality can be descripted as "`degree,
to which health services for individuals and populations increase the likelihood
of desired health outcomes and are consistent with current professional
knowledge."'\cite{Lohr1992} After several deaths of patients in hospitals due to
quality issues, the IOM conducted a research, as a result of which came a
report. In this paper they stated following recommendations \cite[p.
64]{PhilButtell2007}:\\
\begin{enumerate}
  \item Improve leadership and knowledge
  \item Identify and learn from errors
  \item Set performance standards and expectations for safety
  \item Implement safety systems in healthcare organizations\\
\end{enumerate}
%
In this early example of healthcare quality management we see no mentioning of
business model at any stage of the process, concentration is on knowledge and
safety, which is understandable in the context of healthcare services.\\
\\
%
Based on this definition a group of researchers from the US, Phil Buttell,
Robert Hendler and Jennifer Daley proposed a new list of principles, which was
revised and expanded in order to better describe the situation and give more
specific framework to work with, see Figure
\ref{iom}.\cite[p.69]{PhilButtell2007}
%
\begin{figure}[ht]
\centering
\includegraphics[scale=0.6]{images/Bulett_Healthcare_IOM_expanded.pdf}
\caption{Expnaded Version of IOM Principles by Butell, Hendler and Daley}
\label{iom}
\end{figure}
\\
%
In their work they admit, that there is a market for services and patients are
essentially consumers. Thus this definition comes a little bit nearer to the
idea, that healthcare as a whole can be considered as a business and thus,
can also effectively be descripted with appropriate business model.\\
\\
Further research was done in the area with the focus on other industries. The
idea, that Quality Management can be essential to prosper in the field compared
to competitors was already implemented in the framework of Total Quality
Management (TQM), which was reported to be adopted by 93\% of largest 500 firm's
in America.\cite{Powell1995}  Important detail is, that TQM concentrates more on
a strategic value of Quality Management. TQM can be presented as a group of interconnected
principles. The Gunjan Patel from Manipal University described a concept of
quality management (Figure \ref{tqm}), which also can be applied to other
industries, and thus considers healthcare also as a business\cite{Patel2009}.
This concept has interesting parts, such as customer, tools and infrastructure,
but it does not deliver a holistic view on the hospital as it is necessary for 
effective quality management.
%
\begin{figure}[ht]
\centering
\includegraphics[scale=0.65]{images/TQM_Principles.pdf}
\caption{TQM Principles adopted from Gunjan Patel}
\label{tqm}
\end{figure}
\\
%
Many initiatives were started by governments or non--profit organizations in
order to boost competiteveness among organizations and businesses. One of this
is the Malcolm Baldrige National Quality Award (MBNQA), which was created in
1987 by United States Department of Commerce.\cite{Bell1998} Proponents of TQM
argue, that many criteria, which were introduced for quality management in business
entities can also be applied to healthcare organizations. For these reasons the
principles of TQM were presented to MBNQA, which were later reflected in MBNQA
own principles for quality management. Created framework is based on seven
criteria which reflect how organizations function, which processes are involved
and how they have an influence on each other, framework is presented in the
figure \ref{mbnqa}.\cite{DepartmentofCommerce2000} This approach was discusse by Sunil C.
D'Souza and A.H. Sequeira from Chitkara University.\cite{DSouza2011} They did
not only describe quality management as a key component for success, they also
introduced a new toolset based on IT, which is new, compared to other research
papers which we reviewed earlier. They described IT as a key performance area
and argued, that it bears the potential for huge performance gains in the field
of quality management in healthcare.\cite{DSouza2011} Nevertheless it does
not cover as many aspects, as a Business Model Canvcas can offer.\\
%
\begin{figure}[ht]
\centering
\includegraphics[scale=0.6]{images/MBNQA_Principles.pdf}
\caption{Malcolm Baldrige Criteria for Performance Excellence Framework}
\label{mbnqa}
\end{figure}
\\
%
Yet another paper about healthcare quality management suggests, that Malcolm
Baldrige Criteria are great, but also need further development. This is in
accordance with our own view on the issue. Although it does cover main areas in
an organization, it does not give us a whole picture. Researchers from School of
Marketing at University of Technology in Sydney were investigating Ramsay Health
Care Group, where a nine dimensional tool to assess the situation
in every point of time was proposed.\cite[p.158]{Perrott2002} This tool is
designed for periodical effectiveness assessment of organizations, values can vary from poor through excellent, the
areas are defined as follows:\\
\begin{itemize}
  \item Aspiring and focused
  \item Ethical and compassionate
  \item Customer focused and aligned
  \item Effective and efficient
  \item Challenging and empowering
  \item Open and innovating
  \item Objective
  \item Rewarding and developing
  \item Team oriented\\
\end{itemize}
%
Bruce Perrott concentrated his research on the largest healthcare organizations
in Australia, such as Ramsay Group and also the Northside Clinic which
in 2001 generated an operating revenue of AUD 388 million. Ramsay Group already
has a defined planning and decision--making process and Perrott attempts to
integrate quality management activities and goals into it. The result of his
work can be seen in the figure \ref{strategic_qm}.\cite[p. 165 ff.]{Perrott2002}
%
\begin{figure}[ht]
\centering
\includegraphics[scale=0.6]{images/Strategic_QM_Australia.pdf}
\caption{Possible Strategic Management of Quality at Ramsay Group}
\label{strategic_qm}
\end{figure}
\\
\\
%
\newpage
Although presented papers introduce interesting ideas and gradually widened the
view on quality management in healthcare, we still think that Business Model
Canvas gives us a mor structured overview, which can be produced in a timely
manner. This leads us to the idea, that BMC may combine the best parts of
earlier research and with some refinements and adoptions it can give us a
holistic view for an effective quality management, which we are looking for.
